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Software Product Liability Technical Report CMU/SEI-93-TR-13 ESC-TR-93-190 Software Product Liability Jody Armour School of Law, University of Pittsburgh Watts S. Humphrey SEI Fellow, Software Engineering Institute August 1993 Technical Report CMU/SEI-93-TR-13 ESC-TR-93-190 August 1993 Software Product Liability Jody Armour School of Law, University of Pittsburgh Watts S. Humphrey SEI Fellow, Software Engineering Institute Unlimited distribution subject to the copyright. Software Engineering Institute Carnegie Mellon University Pittsburgh, Pennsylvania 15213 This report was prepared for the SEI Joint Program Office HQ ESC/AXS 5 Eglin Street Hanscom AFB, MA 01731-2116 The ideas and findings in this report should not be construed as an official DoD position. It is published in the interest of scientific and technical information exchange. FOR THE COMMANDER (signature on file) Thomas R. Miller, Lt Col, USAF SEI Joint Program Office This work is sponsored by the U.S. Department of Defense. Copyright © 1993 by Carnegie Mellon University. Permission to reproduce this document and to prepare derivative works from this document for internal use is granted, provided the copyright and “No Warranty” statements are included with all reproductions and derivative works. Requests for permission to reproduce this document or to prepare derivative works of this document for external and commercial use should be addressed to the SEI Licensing Agent. NO WARRANTY THIS CARNEGIE MELLON UNIVERSITY AND SOFTWARE ENGINEERING INSTITUTE MATERIAL IS FURNISHED ON AN “AS-IS” BASIS. CARNEGIE MELLON UNIVERSITY MAKES NO WARRAN- TIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER INCLUDING, BUT NOT LIMITED TO, WARRANTY OF FITNESS FOR PURPOSE OR MERCHANTIBILITY, EXCLUSIVITY, OR RESULTS OBTAINED FROM USE OF THE MATERIAL. CARNEGIE MELLON UNIVERSITY DOES NOT MAKE ANY WARRANTY OF ANY KIND WITH RESPECT TO FREEDOM FROM PATENT, TRADEMARK, OR COPYRIGHT INFRINGEMENT. This work was created in the performance of Federal Government Contract Number F19628-95-C-0003 with Carnegie Mellon University for the operation of the Software Engineering Institute, a federally funded research and development center. The Government of the United States has a royalty-free government-purpose license to use, duplicate, or disclose the work, in whole or in part and in any manner, and to have or permit others to do so, for government purposes pursuant to the copyright license under the clause at 52.227-7013. This document is available through Research Access, Inc., 800 Vinial Street, Pittsburgh, PA 15212. Phone: 1-800-685-6510. FAX: (412) 321-2994. RAI also maintains a World Wide Web home page. The URL is http://www.rai.com Copies of this document are available through the National Technical Information Service (NTIS). For informa- tion on ordering, please contact NTIS directly: National Technical Information Service, U.S. Department of Commerce, Springfield, VA 22161. Phone: (703) 487-4600. This document is also available through the Defense Technical Information Center (DTIC). DTIC provides ac- cess to and transfer of scientific and technical information for DoD personnel, DoD contractors and potential con- tractors, and other U.S. Government agency personnel and their contractors. To obtain a copy, please contact DTIC directly: Defense Technical Information Center, Attn: FDRA, Cameron Station, Alexandria, VA 22304- 6145. Phone: (703) 274-7633. Use of any trademarks in this report is not intended in any way to infringe on the rights of the trademark holder. Table of Contents 1 The Software Liability Problem 1 2 The Increasing Uses of Software 3 3 Software Liability Strategies 5 4 Strict Liability 7 5 Negligence 9 6 Warranties 11 7 The Current State of Software Practice 13 8 Some Example Cases 15 8.1 Case 1: A Tax Program 15 8.2 Case 2: A Computerized Drafting System 15 8.3 Case 3: An Automated Tunneling Machine 16 9 The Improvement Opportunity 17 10 Conclusion 19 Appendix A Software Design Complexity 23 Appendix B Software Process Maturity 25 Appendix C The State of Software Practice 27 Appendix D Software Safety 29 Appendix E Software Process Assessment 31 CMU/SEI-93-TR-13 i ii CMU/SEI-93-TR-13 List of Figures Figure 3-1: The Logic of Software Product Liability 6 Figure B-1: Software Process Maturity 26 Figure C-1: Current State of Software Practice 28 CMU/SEI-93-TR-13 iii iv CMU/SEI-93-TR-13 Software Product Liability Abstract: Voyne Ray Cox settled into the radiation machine for the eighth routine treatment of his largely cured cancer. The operator went to the control room and pushed some buttons. Soon, the machine went into action and the treatment began. A soft whir and then an intense searing pain made him yell for help and jump from the machine. The doctors assured him there was nothing to worry about. What they didn't know was that the operator had inadvertently pushed an unusual sequence of controls that activated a defective part of the software controlling the machine. He didn't die for six months but he had received a lethal dose of radiation. This software defect actually killed two patients and severely injured several others. The final decisions in the resulting lawsuits have not been made public. Software defects are rarely lethal and the number of injuries and deaths is now very small. Software, however, is now the principal controlling element in many industrial and consumer products. It is so pervasive that it is found in just about every product that is labeled “electronic.” Most companies are in the software business whether they know it or not. The question is whether their products could potentially cause damage and what their exposures would be if they did. While most executives are now concerned about product liability, software introduces a new dimension. Software, particularly poor quality software, can cause products to do strange and even terrifying things. Software bugs are erroneous instructions and, when computers encounter them, they do precisely what the defects instruct. An error could cause a 0 to be read as a 1, an up control to be shut down, or, as with the radiation machine, a shield to be removed instead of inserted. A software error could mean life or death. 1 The Software Liability Problem Software product liability has not been a historical problem for four reasons. First, until recent- ly, software has largely been used by experts in the computer departments of large corpora- tions. Only in the last few years have small businesses and the general public used it directly. Second, the design of many early software-controlled products has remained relatively sim- ple. The nuclear power industry, for example, has opted for a very conservative design philos- ophy (see Appendix A). Third, the leading vendors have historically marketed their products under tight contracts. Finally, until recently, there have been few lawyers with the expertise to handle such cases. As the general use of software and software controlled products grows and as the public ex- posure to poor quality products mounts, the product liability problem will increase. There is, in fact, evidence that this is happening already. Marr Haack of St. Paul, the insurance underwrit- er, reported that of several hundred software-related claims, half concerned software devel- opment and quality. John Moore, of insurance underwriter Shand Morahan, reports that their suits principally come from failure to perform or failure of the installed software to function. CMU/SEI-93-TR-13 1 Tom Cornwell of Chubb estimates that in three years, their claim size for software-related busi- ness has doubled. John Lautsch, a Silicon Valley attorney, further reported that the American Bar Association’s computer law division membership grew from 89 members in 1980 to more than 500 members in 1985. Membership has continued to increase and it now has passed 1100. There is, in fact, a growing body of legal experience with software damages. The fact that few of these claims are for personal injury or physical damage might suggest that software is a low risk product. If it continues to be used as in the past, that could well be true. There is, however, growing evidence that this will not be the case. 2 CMU/SEI-93-TR-13 2 The Increasing Uses of Software We all expect computer-related products like operating systems, telephone switching sys- tems, and banking systems to contain millions of computer instructions. Less well known is the fact that common products such as television sets, radios, VCRs, and telephones contain hun- dreds and even thousands of program instructions. Projections are that such devices will soon contain a million or more program instructions. The current rate of code growth in many ordi- nary consumer products, if extended for ten years, will approach 100 times. Software use is exploding and it is exploding fastest in products that are used by the general public. From an industrial perspective, software is an almost ideal product. While many decry soft- ware's high cost and poor quality, it is the lowest cost and highest quality way to provide so- phisticated product function. In fact, often software is the only feasible way to implement these functions. Once software is developed, it doesn't wear out or deteriorate, it can be legally pro- tected, its manufacturing costs are trivial, and it is economical to modify and enhance. A good example of these benefits is the nuclear power industry. Many of the nation's 113 nuclear pow- er plants still have controls that are 30 or more years old. As the industry replaces them with modern software-controlled devices, they find reliability is much improved. The exposure to product liability is greatest when software is used to control sophisticated op- erations in safety-critical situations.
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